SYDNEY/SINGAPORE, July 31 (Reuters) - The euro edged higheragainst the dollar on Tuesday but stayed off a recent three-weekhigh, while the Australian dollar hit a four-month high,supported by expectations that major central banks may add morestimulus.

The single currency moved up 0.1 percent from late U.S.trade on Monday to $1.2274, but remained stuck below thehigh of $1.2390 hit last Friday.

The focus is on the European Central Bank's policy meetingon Thursday, after ECB President Mario Draghi pledged last weekto do whatever was necessary to protect the euro zone fromcollapse.

"I think there are more options on the table than we canthink of right now. There's a lot of anticipation after Draghi'scomments," said Jesper Bargmann, Asia head of G11 spot FX forRBS in Singapore.

"The market seems to think that there are going to be somestrong measures and this should boost the commodity currenciesand some of the emerging market currencies," he said.

A popular trade has been to short the euro against theAustralian dollar, New Zealand dollar and some emerging marketcurrencies, Bargmann added.

"The most significant possible measure would be for the ECBto buy bonds and to leave such purchases unsterilised, but Idon't think such steps can be taken as they are likely to meetGerman opposition," said Satoshi Okagawa, senior global marketsanalyst for Sumitomo Mitsui Banking Corporation in Singapore.

Last week, the ECB bought no government bonds via itsSecurities Markets Programme (SMP) for a 20th straight week andit has barely conducted such purchases this year, even as risingborrowing costs in Spain fuelled jitters Madrid may eventuallyneed a full-blown sovereign bailout.

When the ECB bought government bonds in the past, it offset,or sterilised, its purchases by draining equal amounts ofliquidity from the banking system to avoid stoking inflation.

The ECB probably won't go so far as to deviate from thisconvention, SMBC's Okagawa said.

"At the same time, with market expectations running high,they can't afford to do nothing. They raised the bar high ontheir own," he added.

In any event, traders and analysts are sceptical that ECBbond-buying by itself would be enough to change the euro's weakoverall trend.

"It is a short-term relief, but it is not like people aregoing to invest in Europe suddenly for that reason," saidBargmann at RBS.

"We've already seen some serious diversification, not justout of the periphery but out of Europe altogether and these arelonger term decisions and they are not going to turn around inthe short-term," Bargmann said, referring to a shift in assetallocation by central bank reserve managers out of the euro.

AUSTRALIAN DOLLAR

The euro eased 0.2 percent against the high-flyingAustralian dollar to A$1.1656, after having hit arecord low around A$1.1646 the previous day.

The Aussie and other high-beta currencies, which arerelatively volatile and tend to benefit when investor optimismabout the outlook for the global economy picks up, have beenamong the best performers recently.

Such currencies have gotten a lift from market expectationsthat both the ECB and Federal Reserve are closer to providingmore aid for their respective economies.

The Aussie rose 0.3 percent to $1.0526, having hita four-month high of $1.0538 earlier on Tuesday.

The modest rise in the euro weighed on the dollar index,which measures the greenback's value against a basket of majorcurrencies. The dollar index stood at 82.749, holdingnear a three-week low of 82.343 hit last week.

Against the yen, the dollar edged up 0.1 percent to 78.26yen.

While the Fed is seen likely to hold off from adopting another bond-buying programme at its two-day policy meeting thatstarts on Tuesday, some market players think the U.S. centralbank might adopt such monetary stimulus in coming months.